Spain pulled a potential sale for 15-year bonds as the appetite for the issue just wasn’t there. Before the Euro, some in the European debt capital markets, where I worked, pejoratively called Portugal, Italy, Greece, and Spain, the PIGS. Because they had very poor government fiscal management before the Euro, as sovereign debtors, they had spreads which were very wide to German Bunds, then considered the gold standard of European sovereign debt issues.

But, after the Euro was agreed to, many in the bond markets went short Bunds and long PIGS as a ‘convergence’ play causing sovereign spreads to tighten — and with good reason as those countries got their fiscal houses in order and have generally performed well in the decade since.

This is a story about how the ECB move affects individuals. As much as I support the ECB rate hike, one has to remember that real people are very much affected by these policy decisions. This is what makes these decisions difficult.
From the Independent Ireland:

By Ben Sills and Fergal O’Brien
Friday July 04 2008

Jose [...]

As I have said in prior posts, I am a bit of a eurosceptic. It is my view that the Euro is a political construct just as the expanded European Union has been and just as the reunification of East and West Germany on a 1 for 1 currency basis was. When politics come before economics, bad things happen.

And so it is for Ireland. But is the bust actually the Euro’s fault? And if so, is that a bad thing?

The well-deserved euphoria over the European Championship in football has brought welcome relief to Spanish consumers, weighed down by a slow economy. However, global economies have not decoupled from the U.S. slowdown. European economies are suffering, Denmark having already declared recession.
In this piece I am going to take a look at the Spanish economy and [...]

Banco Santander, to date, has looked very robust as a financial institution in weathering the credit crisis. Despite significant exposure to bubble markets Spain and the UK, the company has not been required to write down a large amount of credit losses.

I am hearing from multiple sources that the large property company Drac, based in Mallorca in Spain, has filed for bankruptcy. The company had 600 or 700 million euros of debt at the time of its bankruptcy, depending upon the source. Drac had constructed more than 2,000 apartment flats on the Island and [...]

That’s what Sir Howard Davies, a former deputy governor of the Bank of England (BoE), has to say.

As the Euro celebrates its tenth anniversary, Vaclav Klaus, the President of the Czech Republic, says:
“The question is whether the eurozone countries and their citizens have cause to celebrate. The answer is uncertain, given the zone’s sluggish economic growth, great growth differences among countries and large differences in inflation, even though a single currency should [...]

I have been reading the Spanish press a lot recently to see what is happening in the Spanish property market. On the one hand, the country is transfixed over a strike by truck drivers (link in Spanish) that has left Spain’s major cities without adequate food supplies.
Nevertheless, on the other hand, over the past [...]

I am a Euroscpetic. I admire the political will of Europe’s grand designers in creating the Euro, but I have always felt that harmonisation would be a painful process fraught with tension – especially during economic downturns. And so it is today.